Emerging markets drive Praxair Q2 net income increase

24 July 2013 12:18[Source: ICIS news]

LONDON (ICIS)--Praxair’s net income for the second quarter increased by 4% compared with the same period in 2012, on the back of a 7% year on year increase in sales, the US-headquartered industrial gases company said on Wednesday.

Net income rose to $445m (€338m) during the quarter, while operating profit was up 5% year on year to $665m, driven by higher volumes and pricing, the company added.

Sales volumes increases in Asia and South America helped to offset lower volumes in Europe and stable volumes in North America, the company added.

Second-quarter sales were $3.01bn in 2013, compared to $2.81bn during the same period last year.

CEO Steve Angel said: “Our on-site business continued to be very strong with improving volumes to the energy, chemicals and metals industries across the Americas and Asia. Merchant deliveries continued to grow modestly with stable demand from healthcare and food and beverage.

“However, packaged gas demand weakened slightly due to poor overall business confidence and lower private and public spending on construction and capital projects,” he added.

Higher pricing in Europe was offset by lower volumes, Praxair said, while recently-acquired beverage carbonation company NuC02 helped to drive growth in North America, Praxair said.

Sales in South America were buoyed by the metal, chemicals and healthcare markets, while higher on-site and merchant sales sustained Asian growth, the company added. However, operating profit for Asia was down 10% year on year, despite the increase in sales.

Angel predicted that the energy, chemicals and metals markets would continue to drive growth in Asia and the Americas, healthcare and food industry demand to be stable, and packaged gas demand to be weak as a result of weak business confidence and reduced investment in capital projects.

“In the near term, we expect these trends to continue with the strongest growth in chemicals, energy and emerging markets. Fortunately, we are well positioned geographically and have a strong backlog of large on-site projects being readied for start-up,” he said.